Thanks guys--a little more info on float and comparison to inin as to potential value from the RB threaI havn't cross verified the numbers but even with a bit of dilution looks good at superficial glance.):
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I just couldn't help myself but I got to thinking again. ININ's market cap right now is approximately $140 million (thats .195 cents multiplied by 700,000,000 shares outstanding - I rounded). HVAR's market cap is only about $8.7 million (thats .33 cents multiplied by 26,500,000 shares outstanding). The shares outstanding are higher - I talked to the transfer agent due to the Series A that was being converted, but appears to have stopped. It doesn't seem like the Series A will hurt us anymore. Others have stated that the Series A agreed not to convert anymore shares for 90 days. This would appear to be true given the stock price performance over the last 5 days. If the Series A had been diluting over the last 5 days the stock price wouldn't have been able to sustain itself. Steve Shatzman also stated to me that he has a very good relationship with the Series A and that if he requested they would cease to dilute... The higher the share price the more nominal the dilutive effect of the Series A per the conversion formula. At .35 cents a share the remaining Series A would only increase the share base by approximately 3.5 million shares. Shatzman obviously believes that the share price will go higher over the next 2 plus months (assuming the 90 day no dilution rule). As we go higher the Series A will become more meaningless meaningless.
By the way, the only kind of Series A that agrees to be that friendly with convertable securities must already be a shareholder (IMO). When convertable securities convert convert they are automatically sold into the market. The Series A will get the same $ whether its converted at .10 cents, 50 cents or $5 based on the conversion formula. Based on the time value of money though 99.9% of convertable securities are converted as soon as they are eligible.
Back to the comparison to ININ (stogies.com). ININ sells cheap stogies, is diluted to the hilt with over 700,000,000 shares outstanding and has an unbelievable market capitalization. HVAR is not badly diluted, will be profitable soon, has a solid operating model, has a proprietary product in their private label cigars, vertically integrated so margins will be strong (assuming their cigars gain market acceptance), have a web site coming on line, more stores in the offing, keep SG&A cost to a minimum, and ARE FULLY REPORTING! At the comparable market cap as ININ, HVAR would be trading at $5.28 a share (thats 140,000,000/26,500,000).
The recent moves by General Cigar (ticker MPP) back HVAR's operating model of focusing only on highend cigars as the margins are better. General cigar sold its high volume low margin cheaper cigar lines to a Swiss company.
I love the prospects for this company. People selling at these prices are nuts IMO! Look to the company's business model and how the company is run - that should give you confidence to stay in for the long haul. Who knows the "long haul" may not be that far off....>>>
$5+...reasonable long term ? Any thoughts?
Best wishes,
patwrk |
